DOESN'T THIS MAKE SENSE? NO TAXPAYER MONEY REQUIRED TO HELP FINANCIAL MARKETS

It's time to call or email your Senator before the vote Wednesday night and let them know how you feel about the Bush/Paulson Wall Street Bailout. DeFazio Introduces the No BAILOUTS Act

The following is a Dear Colleague sent by Representative DeFazio introducing his No BAILOUTS Act, which would Address the current financial crisis without putting the American taxpayer on the hook for billions of dollars. Dear Democratic Colleague: The House of Representatives rejected the $700 bailout yesterday. Distinguished economists across the world have stated it would not have solved the problem at hand. However, we can potentially solve this liquidity problem at little cost to the taxpayer. I am proposing that Congress drop the Paulson Plan, and instead pass the No BAILOUTS Act. The No BAILOUTS Act provides an alternative to the Paulson Proposal to address the current credit crunch. Once Congress addresses the liquidity shortfalls in our financial markets, a Democratic Congress can turn to Democratic solutions to address the broader economic crises we face today. Specifically, Congress can work to resolve the housing crisis across the country and pass effective job stimulus, which is the response Main Street America expects and deserves. While Democrats and Republicans may disagree on the underlying solutions to solve the economic crises we face, the No BAILOUTS Act - a regulatory based proposal - has the potential for significant bipartisan support. The Paulson Premise Flawed Simon Johnson, a former chief economist as the International Monetary Fund, stated today in the New York Times of Paulson’s plan, “It’s our view that this package, in a fundamental sense, will not solve the problem.” Other economic analysts noted yesterday that the credit markets around the world were almost entirely dysfunctional even when political leaders and investors assumed that Congress had reached a deal and would easily approve the bailout. There is no reason to believe Paulson’s plan will work. Alternatives We have credible alternatives to the Paulson/Bush $700 billion gamble. William Isaac, the chairman of the FDIC during the previous worst financial crisis in the United States during the 1980s, believes Congress can address the current crisis with simple changes to Securities and Exchange Commission (SEC) rules. Mr. Isaac points out that while we face serious financial challenges today, many banks are still in good shape. This allows Congress to take swift, uncomplicated steps to ensure the financial markets return to working order. After that, we can work to resolve the housing crisis and pass effective job stimulus. Today I am offering an alternative to the Wall Street bailout that will correct the capital shortfalls experienced by many financial institutions and help protect the integrity and quality of the securities market. My plan could be implemented promptly meeting the demands of the Bush Administration to act immediately without putting the American taxpayer on the hook for billions of dollars. No BAILOUTS Act Bringing Accounting, Increased Liquidity, Oversight and Upholding Taxpayer Security 1) Require the Securities and Exchange Commission (SEC) to require an economic value standard to measure the capital of financial institutions. This bill will require SEC to implement a rule to suspend the application of fair value accounting standards to financial institutions, which marks assets to the market value, no matter the conditions of the market. When no meaningful market exists, as is the current market for mortgage backed securities, this standard requires institutions to value assets at fire-sale prices. This creates a capital shortfall on paper. Using the economic value standard as bank examines have traditionally done will immediately correct the capital shortfalls experienced by many institutions. 2) Require the Securities and Exchange Commission to restricting naked short sells permanently This bill will require SEC to implement a rule that blocks naked selling, selling a stock short without first borrowing the shares or ensuring the shares can be borrowed. Such practices many times harm the companies represented in the sales and hurt their efforts to raise capital. There is no economic value produced by naked short sales, but significant negative effects. 3) Require the Securities and Exchange Commission to restore the up-tick rule permanently. This bill will require SEC to implement a rule that blocks short sales without an up-tick in the market. On September 19, 2008, the SEC approved a temporary pause of short selling in financial companies “to protect the integrity and quality of the securities market and strengthen investor confidence.” This rule prevents market crashes brought on by irrational short term market behavior. 4) “Net Worth Certificate Program” This bill will require FDIC to implement a net worth certificate program. The FDIC would determine banks with short-term capital needs and the ability to financially recover in the foreseeable future. For those entities that qualify, the FDIC should purchase net worth certificates in these institutions. In exchange, these institutions issue promissory notes to repay the FDIC, counting the amount “borrowed” as capital on their balance sheets. This exchange provides short term capital, with not cash outlay. Interest rates on the certificates and the FDIC notes should be identical so no subsidy is necessary. Participating banks must be subject to strict oversight by the FDIC including oversight of top executive compensation and if necessary the removal of poor management. Financial records and business plans should be subject to scrutiny while participating in the program. In 1982, Congress approved a program, known as the Net Worth Certificate Program, that allowed banks and thrifts to apply for immediate capital assistance. From 1982 to 1993, banks with total assets of $40 billion participated in the program. The majority of these banks, 75%, required no further assistance beyond the certificate program. 5) Increase the FDIC Insurance limit from $100,000 to $250,000. The bill will require the FDIC raise its limit to provide depositors confidence that their money is safe and help eliminate runs on banks which are destabilizing to the industry. Sincerely Peter DeFazio Member of Congress

CONGRATULATIONS, CORPORATE CRIME FIGHTERS! COUP AVERTED FOR THREE DAYS!

from Michael Moore

Friends,

Everyone said the bill would pass. The masters of the universe were already making celebratory dinner reservations at Manhattan's finest restaurants. Personal shoppers in Dallas and Atlanta were dispatched to do the early Christmas gifting. Mad Men of Chicago and Miami were popping corks and toasting each other long before the morning latte run.

But what they didn't know was that hundreds of thousands of Americans woke up yesterday morning and decided it was time for revolt. The politicians never saw it coming. Millions of phone calls and emails hit Congress so hard it was as if Marshall Dillon, Elliot Ness and Dog the Bounty Hunter had descended on D.C. to stop the looting and arrest the thieves.

The Corporate Crime of the Century was halted by a vote of 228 to 205. It was rare and historic; no one could remember a time when a bill supported by the president and the leadership of both parties went down in defeat. That just never happens.

A lot of people are wondering why the right wing of the Republican Party joined with the left wing of the Democratic Party in voting down the thievery. Forty percent of Democrats and two-thirds of Republicans voted against the bill.

Here's what happened:

The presidential race may still be close in the polls, but the Congressional races are pointing toward a landslide for the Democrats. Few dispute the prediction that the Republicans are in for a whoopin' on November 4th. Up to 30 Republican House seats could be lost in what would be a stunning repudiation of their agenda.

The Republican reps are so scared of losing their seats, when this "financial crisis" reared its head two weeks ago, they realized they had just been handed their one and only chance to separate themselves from Bush before the election, while doing something that would make them look like they were on the side of "the people."

Watching C-Span yesterday morning was one of the best comedy shows I'd seen in ages. There they were, one Republican after another who had backed the war and sunk the country into record debt, who had voted to kill every regulation that would have kept Wall Street in check -- there they were, now crying foul and standing up for the little guy! One after another, they stood at the microphone on the House floor and threw Bush under the bus, under the train (even though they had voted to kill off our nation's trains, too), heck, they would've thrown him under the rising waters of the Lower Ninth Ward if they could've conjured up another hurricane. You know how your dog acts when sprayed by a skunk? He howls and runs around trying to shake it off, rubbing and rolling himself on every piece of your carpet, trying to get rid of the stench. That's what it looked like on the Republican side of the aisle yesterday, and it was a sight to behold.

The 95 brave Dems who broke with Barney Frank and Chris Dodd were the real heroes, just like those few who stood up and voted against the war in October of 2002. Watch the remarks from yesterday of Reps. Marcy Kaptur, Sheila Jackson Lee, and Dennis Kucinich. They spoke the truth.

The Dems who voted for the giveaway did so mostly because they were scared by the threats of Wall Street, that if the rich didn't get their handout, the market would go nuts and then it's bye-bye stock-based pension and retirement funds.

And guess what? That's exactly what Wall Street did! The largest, single-day drop in the Dow in the history of the New York Stock exchange. The news anchors last night screamed it out: Americans just lost 1.2 trillion dollars in the stock market!! It's a financial Pearl Harbor! The sky is falling! Bird flu! Killer Bees!

Of course, sane people know that nobody "lost" anything yesterday, that stocks go up and down and this too shall pass because the rich will now buy low, hold, then sell off, then buy low again.

But for now, Wall Street and its propaganda arm (the networks and media it owns) will continue to try and scare the bejesus out of you. It will be harder to get a loan. Some people will lose their jobs. A weak nation of wimps won't last long under this torture. Or will we? Is this our line in the sand?

Here's my guess: The Democratic leadership in the House secretly hoped all along that this lousy bill would go down. With Bush's proposals shredded, the Dems knew they could then write their own bill that favors the average American, not the upper 10% who were hoping for another kegger of gold.

So the ball is in the Democrats' hands. The gun from Wall Street remains at their head. Before they make their next move, let me tell you what the media kept silent about while this bill was being debated:

1. The bailout bill had NO enforcement provisions for the so-called oversight group that was going to monitor Wall Street's spending of the $700 billion;

2. It had NO penalties, fines or imprisonment for any executive who might steal any of the people's money;

3. It did NOTHING to force banks and lenders to rewrite people's mortgages to avoid foreclosures -- this bill would not have stopped ONE foreclosure!;

4. It had NO teeth anywhere in the entire piece of legislation, using words like "suggested" when referring to the government being paid back for the bailout;

5. Over 200 economists wrote to Congress and said this bill might actually WORSEN the "financial crisis" and cause even MORE of a meltdown.

Put a fork in this slab of pork. It's over. Now it is time for our side to state very clearly the laws WE want passed. I will send you my proposals later today. We've bought ourselves less than 72 hours.

Yours,
Michael Moore
MMFlint@aol.com
MichaelMoore.com

DAVID WU, EARL BLUMENAUER, AND PETER DeFAZIO STAND UP AND REJECT BUSH BAILOUT

Oregon residents can rejoice that three of its congressional representatives stood up to George W. Bush and his $700 Billion Wall Street bailout and voted no on HR 3997 today.

Please call or email and thank them for their support of the American people.

OBAMA PROMISES TO STOP AMERICA'S SHITTY JOBS FROM GOING OVERSEAS

Obama Promises To Stop America's Shitty Jobs From Going Overseas

THE RICH ARE STAGING A COUP THIS MORNING

Monday, September 29th, 2008
The Rich Are Staging a Coup This Morning ...a message from Michael Moore

Friends,

Let me cut to the chase. The biggest robbery in the history of this country is taking place as you read this. Though no guns are being used, 300 million hostages are being taken. Make no mistake about it: After stealing a half trillion dollars to line the pockets of their war-profiteering backers for the past five years, after lining the pockets of their fellow oilmen to the tune of over a hundred billion dollars in just the last two years, Bush and his cronies -- who must soon vacate the White House -- are looting the U.S. Treasury of every dollar they can grab. They are swiping as much of the silverware as they can on their way out the door.

No matter what they say, no matter how many scare words they use, they are up to their old tricks of creating fear and confusion in order to make and keep themselves and the upper one percent filthy rich. Just read the first four paragraphs of the lead story in last Monday's New York Times and you can see what the real deal is:

"Even as policy makers worked on details of a $700 billion bailout of the financial industry, Wall Street began looking for ways to profit from it.

"Financial firms were lobbying to have all manner of troubled investments covered, not just those related to mortgages.

"At the same time, investment firms were jockeying to oversee all the assets that Treasury plans to take off the books of financial institutions, a role that could earn them hundreds of millions of dollars a year in fees.

"Nobody wants to be left out of Treasury's proposal to buy up bad assets of financial institutions."

Unbelievable. Wall Street and its backers created this mess and now they are going to clean up like bandits. Even Rudy Giuliani is lobbying for his firm to be hired (and paid) to "consult" in the bailout.

The problem is, nobody truly knows what this "collapse" is all about. Even Treasury Secretary Paulson admitted he doesn't know the exact amount that is needed (he just picked the $700 billion number out of his head!). The head of the congressional budget office said he can't figure it out nor can he explain it to anyone.

And yet, they are screeching about how the end is near! Panic! Recession! The Great Depression! Y2K! Bird flu! Killer bees! We must pass the bailout bill today!! The sky is falling! The sky is falling!

Falling for whom? NOTHING in this "bailout" package will lower the price of the gas you have to put in your car to get to work. NOTHING in this bill will protect you from losing your home. NOTHING in this bill will give you health insurance.

Health insurance? Mike, why are you bringing this up? What's this got to do with the Wall Street collapse?

It has everything to do with it. This so-called "collapse" was triggered by the massive defaulting and foreclosures going on with people's home mortgages. Do you know why so many Americans are losing their homes? To hear the Republicans describe it, it's because too many working class idiots were given mortgages that they really couldn't afford. Here's the truth: The number one cause of people declaring bankruptcy is because of medical bills. Let me state this simply: If we had had universal health coverage, this mortgage "crisis" may never have happened.

This bailout's mission is to protect the obscene amount of wealth that has been accumulated in the last eight years. It's to protect the top shareholders who own and control corporate America. It's to make sure their yachts and mansions and "way of life" go uninterrupted while the rest of America suffers and struggles to pay the bills. Let the rich suffer for once. Let them pay for the bailout. We are spending 400 million dollars a day on the war in Iraq. Let them end the war immediately and save us all another half-trillion dollars!

I have to stop writing this and you have to stop reading it. They are staging a financial coup this morning in our country. They are hoping Congress will act fast before they stop to think, before we have a chance to stop them ourselves. So stop reading this and do something -- NOW! Here's what you can do immediately:

1. Call or e-mail Senator Obama. Tell him he does not need to be sitting there trying to help prop up Bush and Cheney and the mess they've made. Tell him we know he has the smarts to slow this thing down and figure out what's the best route to take. Tell him the rich have to pay for whatever help is offered. Use the leverage we have now to insist on a moratorium on home foreclosures, to insist on a move to universal health coverage, and tell him that we the people need to be in charge of the economic decisions that affect our lives, not the barons of Wall Street.

2. Take to the streets. Participate in one of the hundreds of quickly-called demonstrations that are taking place all over the country (especially those near Wall Street and DC).

3. Call your Representative in Congress and your Senators. (click here to find their phone numbers). Tell them what you told Senator Obama.

When you screw up in life, there is hell to pay. Each and every one of you reading this knows that basic lesson and has paid the consequences of your actions at some point. In this great democracy, we cannot let there be one set of rules for the vast majority of hard-working citizens, and another set of rules for the elite, who, when they screw up, are handed one more gift on a silver platter. No more! Not again!

Yours,
Michael Moore
MMFlint@aol.com
MichaelMoore.com

P.S. Having read further the details of this bailout bill, you need to know you are being lied to. They talk about how they will prevent golden parachutes. It says NOTHING about what these executives and fat cats will make in SALARY. According to Rep. Brad Sherman of California, these top managers will continue to receive million-dollar-a-month paychecks under this new bill. There is no direct ownership given to the American people for the money being handed over. Foreign banks and investors will be allowed to receive billion-dollar handouts. A large chunk of this $700 billion is going to be given directly to Chinese and Middle Eastern banks. There is NO guarantee of ever seeing that money again.

P.P.S. From talking to people I know in DC, they say the reason so many Dems are behind this is because Wall Street this weekend put a gun to their heads and said either turn over the $700 billion or the first thing we'll start blowing up are the pension funds and 401(k)s of your middle class constituents. The Dems are scared they may make good on their threat. But this is not the time to back down or act like the typical Democrat we have witnessed for the last eight years. The Dems handed a stolen election over to Bush. The Dems gave Bush the votes he needed to invade a sovereign country. Once they took over Congress in 2007, they refused to pull the plug on the war. And now they have been cowered into being accomplices in the crime of the century. You have to call them now and say "NO!" If we let them do this, just imagine how hard it will be to get anything good done when President Obama is in the White House. THESE DEMOCRATS ARE ONLY AS STRONG AS THE BACKBONE WE GIVE THEM. CALL CONGRESS NOW.

DEBATE HIGHLIGHTS BETWEEN OBAMA AND McCAIN

YANKEES, STEINBRENNER BEG FOR A FED BAILOUT

BRONX, N.Y. (CAP) - As Yankees fans said goodbye to The House that Ruth Built last weekend, owner Hank Steinbrenner has drawn the ire of Congressional Democrats with his request that Bronx Bombing this summer be included in the massive bailout of Wall Street.

Despite a $220 millon payroll - by far the most in all of baseball - the Yankees will not make the playoffs this season in what is being called the Freddie Mac Attack of the American League. Sources say the "Fannie Mae Mets" could be included in the $700 billion proposal should the second Gotham entry choke its place in the National League playoffs.

"We are seeing the government hand out fistfuls of charity to banks that made bad investments and people who bought houses they couldn't afford," a Yankees front office source said. "But what about us? We are paying Jason Giambi $18 million a year and the only benefit we've gotten is added sales to the moustache-wearing, porn-star crowd.

"Even in New York City, that's a little creepy," the source added.

Steinbrenner is reportedly hoping the government will take over the entirety of the $300 million contract extension given to Alex Rodriguez this summer.

"We were duped," a Yankees scout noted. "Scott Boras came to us and said it was a great deal. He said we needed to get in on this before his value skyrocketed, and that we could always refinance his contract later after it appreciated in value. But we forgot that he is a mansion that will sink into the swamp land when the pressure is on. We might as well have bought the Brooklyn Bridge ... again."

Analysts say the bloated Yankees payroll became a black hole the team dove further into in a fruitless effort to dig themselves out.

"They signed a catcher in Jorge Posada who could no longer catch," a CNBC anchor noted, "a center fielder in Johnny Damon who could not longer run, gave a contract extension to a second baseman in Robinson Cano who no longer tries hard and signed a pitcher in Carl Pavano who never pitches.

"You tell us: doesn't that sound like people who need to be saved from themselves?"

Critics have railed against the Yankees for seaking a golden parachute on the disaster of the current season while they move into a new Yankee Stadium that promises a gold mine of revenue starting next season.

"Hey, if it's good for all of John McCain's advisers, it's good enough for us," Steinbrenner's office replied.

JOHN McCAIN BAILS OUT ON LETTERMAN SO HE CAN SAVE THE ECONOMY

KEITH OLBERMANN FILLS IN FOR THE MISSING McCAIN (John may wish he was there when he sees this)

IF YOU WANT PEOPLE TO UNDERSTAND SOMETHING, EXPLAIN IT IN TV TERMS

CNBC
How Will the Bailout Work? No One Actually Knows
Thursday September 25, 11:20 am ET

If taxpayers are having trouble understanding the Bush administration’s Wall Street rescue plan, they might want to think of it in terms of some popular TV shows: "Who’s the Boss?" "Deal or No Deal" "Jeopardy" and "Leave it to Beaver".

Though Congress has expressed legitimate concern about adequate oversight and transparency, the bigger questions may be about concept and execution—or how the game is played—as it concerns management, assets and pricing.

"Who's the Boss?"

Though no one wants the creation of a massive government agency, the program will have to be administered by someone.

Neither the Treasury nor the Federal Reserve is an appropriate choice. At one time, Freddie Mac (NYSE:FNM - News) and Fannie Mae (NYSE:FRE - News) might have been, but those organizations been discredited in the credit crunch crisis.|

In the S&L bailout, the government had “existing government resources,” says former regulator and White House economist Lawrence White. “It had the benefit of an asset-disposal unit already up and running at FDIC.”

“What government agency is going to oversee see this?” money manager Eric Novde told CNBC, referring to a million properties and assets to “make sure they are properly managed.”

Though there's been some talk about the FDIC, Treasury Secretary Henry Paulson seems to be counting on “really good asset managers,” as he called them during his Congressional testimony Monday, under the supervision of the Treasury, which will have “full discretion over the management of the assets,” according to the outline released over the weekend.

All of this raises the question of competence.

“I don't know if anyone can answer that in an affirmative way,“ says Donald Riegle, chairman of the Senate Banking Committee in the S&L era.“You need a workout team. Whether or not we have people in place today. Administratively, I’d be surprised if we had it."

Steven Seelig, who ran a huge asset disposal team at the FDIC during the S&L crisis, says “one reason the bailout worked well” was because “we had people with expertise in doing this, including management.”

At one point in the process, Seelig approved the transfer of 800 FDIC employees—many of them middle managers—to the RTC in a single day.

"Deal or No Deal"

Though there’s been general acceptance of the reverse auction mode, there are many doubts about an effective pricing of assets.

“The question is: Is this going to be an asking process or a telling process?” says Scott Rothbort, president of LakeView Asset Management.

Much like the glut of homes on the market and the risk of foreclosure, if everyone is trying to sell, there’s a natural downward spiral on prices, says Alex Pollock of the American Enterprise Institute, so there’s always that risk.

On the other hand, sellers of the debt—like homeowners—may be reluctant to go too low in price, either because they can’t afford to or they’re unrealistic about the market.

“You're not guaranteed the government is going to take it,” adds Seelig, who’s now with the International Money Fund.

Pollock, who was president of the Home Loan Bank of Chicago for more than a decade, says the government needs to say it’s “only going to buy the cheapest one, [those] at the best price.”

Presumably that’s preferable to what’s happening in the private sector with vulture investors.

Jay Brinkman, chief economist at the Mortgage Bankers Association, says lenders have already had “numerous opportunities to get rid” of distressed loans at a “deep discount” but most haven’t.

Fed Chairman Ben Bernanke seemed to be addressing the price question Wednesday, telling Congress: “Over time, there’s no way to hide the real value of an asset.”

"Jeopardy"

There also remains considerable question about the mix of assets involved in the auction, which will affect both their management and resolution.

Both the FDIC and RTC wrestled with that in the S&L bailout, says Seelig

“A lot depends on the types of assets you have,” says Selling. “You can take mortgages and turn them over to a mortgage service, get them into shape, clean up the documentation, so you could sell them,” partly because you have the underlying value of the real estate.

Seeing says it was also “relatively easy” to sell other, small consumer loans but the FDIC had “trouble” moving “large commercial, non-performing loans,” such as some of assets of Continental Illinois, the big bank failure of the time.

That gets even more complicated as the debt becomes more derivative, which has also crossed the mind of investors.

“What can anyone do that holds those securities?” Doug Dachille of First Principles Capital Management said in his appearance as a CNBC contributor Wednesday. “There's hundreds of thousands of little pieces of these securities. You don't know the borrower…What is the government really going to do then hold these to maturity?”

Paulson’s plan seems to anticipate that possibility by seeking authority to hold the assets as long as it likes.

“They have to be able to add some value to it,” says Seelig. “In some cases, you'll have to restructure the loan to turn it into a cash-flowing loan,” which could mean forgiving some principal or lowering the interest rate.”

Holding the assets has it’s own set of pluses and minuses.

The more debt the government has to hold and the longer it has to hold it, the worse the balance sheet because less cash is generated and money needs to be borrowed at a faster rate.

At the same time, waiting may benefit both the credit market and the rescue program, which—first and foremost—wants to avoid any appearance that it dumping assets.

“I think they want it to age a little bit,” says Rothbort, who's also a professor at Seton Hall’s Stillman School of Business. “and show that it is worth more than people think. Otherwise, it's back to one big guessing game.”

"Leave it to Beaver"

ED NOTE: To me, the best way to explain this whole mess can be summed up in a old "Leave it to Beaver" episode. The one in which Wally has a job selling ice cream bars and he extended credit to his friends who promised to pay him back. Of course at the end of the week he was short on cash when it was time to turn in the proceeds. Ward had to bail him out, but Wally learned a very valuable lesson.

JOHN McCAIN TRIES TO WEASEL OUT OF FRIDAY'S DEBATE

NEW FEATURE ADDED TO SUNSET TRANSIT CENTER BULLETIN BOARD

Just in time for the advent of the fall season, TriMet operators can take advantage of a new addition to the constantly evolving bulletin board at the Sunset Transit Center. A six day weather forecast is posted so operators can be aware of any changes in the local weather and can take appropriate action.

"I hope no one will be offended by this posting and will remove it," said Sunset Bob on Tuesday. "With the rainy season knocking on our door and the temperatures dropping, operators won't be caught off guard and will dress accordingly. I have spoken to Fred Hansen to see if we can tap into ODOT's weather instruments at the Transit Center and have "real time" information available. He has promised to check into it so I hope we can achieve yet another enhancement to the Sunset Transit Center."

CHICKEN LITTLE WAS RIGHT

by Stephen Pizzo


Funny how history has a way of turning back on itself.

Remember when the Berlin Wall fell in 1989 and Republicans claimed that Ronald Reagan's aggressive policies toward the Soviet Union had won the Cold War. In particularly they claim that Reagan's fabulously expensive "Star Wars" anti-missile system had forced the Soviets to spend so much on their own military projects that it bankrupted them.

Well, there's truth in that. Between trying to compete with Reagan's military spending and their own misadventure in Afghanistan the Soviet Union went bust. Decades of over-spending on its military, under-spending on critical domestic needs and saddled with a flawed and increasingly corrupt economic dogma all collided at once, ending in utter and complete collapse.

Nearly 20-years later America is building its own wall along our southern border, spending $12 billion a month fighting twin wars in Iraq and Afghanistan, while not investing in our aging, crumbling infrastructure and -- finally -- free-market radicals in this administration allowed the economy to be run into the ground by increasingly corrupt and self-indulgent players.

Add to that $3 trillion in tax cuts skewed towards America's richest citizens, and now another $1 trillion (likely more) to bailout companies run or owned by the very recipients of those tax cuts. Add it all together and what you get is what the Soviets got twenty years ago -- a reality-round right between the eyes.

In the days and weeks ahead you're going to hear a lot from Washington about how they've got a handle on all this. But they really don't, not even close. Because, you see, there's no money in the national bank account and our favorite lenders, the Chinese, Japanese and, increasingly, Middle East oil producing states, have been dragged into this economic morass themselves. The last thing of those lending nations need or want right now are a few hundred billion in USA IOUs.


But even if those lending nations were willing to continue to drop spare change into America's tin cup, there's not enough dimes on earth to fill the hole that's been created by Wall Street's Frankenstein creations called "derivatives."


I'm not going to waste your time trying to explain derivatives... because they can't be explained. Warren Buffett calls them ,''Weapons of financial mass destruction.''


According to the International Swaps and Derivatives Association, the notional value of CDS totaled $63 trillion at the end of last year. Estimates for this year are more like $67 trillion.


Alan Blinder, the former Fed vice chairman, who holds a doctorate in economics from M.I.T. admits that even he doesn't understand derivatives. “I know the basic understanding of how they work,” he said, “but if you presented me with one and asked me to put a market value on it, I’d be guessing.”


The point everyone misses," wrote economist Robert Chapman a decade ago, "is that buying derivatives is not investing. It is gambling, insurance and high stakes bookmaking. Derivatives create nothing."


Today, the outstanding "value" of derivative swaps stands at about $50 trillion. (By the way, that's up from $900 billion in 2001.) But the values investors and institutions placed on their books for these derivatives bears little connection to their actual value. And no one -- I mean NO ONE -- really knows what those things are really worth. First regulators and investors will have to determine a current real market value for each of them. To do that they have to untangle each of these Rubic Cubes; how they are amortized, who has claims on all or part of each, when they're due, etc. Only then will they learn what all these underlying assets are truly worth. They may be worth only pennies on the dollar. In many cases regulators -- and taxpayers now backing these instruments-- will learn they are not worth the cost of the electricity to put them through a document shredder.


All the activity you see at the White House in recent days has only one goal; to avoid a total collapse on Bush's watch. By the time the next President takes office the current administration will have eaten all the nation's remaining seed corn, leaving the next administration virtually nothing to re-grow the economy.


And then there's America's exhausted military. The surge succeeded, but not in the way the administration likes to claim. The surge succeeded putting off the inevitable collapse in Iraq until after Bush leaves office.


With the US consumer and financial system gutted and our military stretched far beyond its limits, the next Commander-in-Chief will be left with only one choice; to end military operations in Iraq and let the chips fall where they will between waring Sunnis and Shiites. And then to move some of those military resources to the real threats to the world, Afghanistan and nuclear-armed Pakistan.


Even then it will be difficult to maintain full-scale military operations there unless our NATO allies increase their commitments. Unfortunately Europe also finds itself being dragged down by the US financial market collapse.


Finally, don't even think about universal healthcare. As job looses hit and hit and hit again in the months ahead, the 50 million Americans currently without healthcare will mushroom. But there will be no money left to address this national shame.

So who do we need in the White House next January? Again look back to see ahead.

Bush has been compared with Herbert Hoover, and not without good reason. And even now, he follows in Hoover's failed footsteps.

In 1930s the nation found itself in the same fix. Wall Street had been allowed -- even encouraged -- to run wild by Republican President Herbert Hoover. And, surprise, surprise, when left to their own devices Wall Streeters fouled their own nest, and everyone else's.

Hoover's response was, first, to assure everyone that 'the fundamentals of the American economy are sound."

October 2, 1930: “During the past year you have carried the credit system of the nation safely through a most difficult crisis. In this success you have demonstrated not alone the soundness of the credit system, but also the capacity of the bankers in emergency.” — Herbert Hoover, Address before the annual convention of The American Bankers Association, Cleveland

Then, as the economy continued to implode, Hoover created something called the Reconstruction Finance Corporation, (RFC) a federally-owned bank to bail out commercial banks by extending loans to them, much as the privately-owned Federal Reserve is doing today.

That's pretty much what this administration has been up to this week.

But history teaches that Hoover's ploy failed. The last thing big banks needed was more debt... they had too much debt already. What they needed was for ordinary Americans to begin investing and spending again.

When Franklin Roosevelt took over he understood that. so one of the first things he did was change the RFC's mission. Under Roosevelt the RFC stopped propping up big banks and turned it's attentions to propping up ordinary Americans by making loans for housing, agriculture and small business creation.

As that help began to revitalize the American economy Roosevelt again tweaked the RFC by having it begin extending credit for infrastructure repair and development. Historians say it was that spending that prepared the US for the second world war.

In other words, trickled down has never worked. Strong economies and strong nations are built from the bottom up, not the top down. Any stonewall builder will tell you that, while the big stones are the ones that standout in stone wall, it's the little stones that hold the big stones in place.

John McCain is a big stone kinda fella, like Bush. The only time he even acknowledges the existence of us small stones is when he needs our vote. If you doubt that just listen to him. He wants the to make the Bush tax cuts for the big stones permanent, and more tax cuts for them as well.

Only Barack Obama is talking about recreating the bottom up kind of economy that Roosevelt created and which made America the wealthiest and strongest nation on earth.

But as of today America is the Soviet Union, circa 1989.

SO LONG YANKEE STADIUM

APRIL 18, 1923 to SEPTEMBER 21, 2008

No matter what you thought of the team, we'll all miss the "House that Ruth built".

LEHMAN BROTHERS TO RETURN AS DISCOUNT CLOTHING OUTLET

WALL STREET (CAP) - Lehman Brothers, the global financial services company that declared bankruptcy earlier this month, will reopen later this fall as a discount men's clothing outlet, according to CEO Richard S. Fuld, Jr.

"The Board of Directors did some extensive surveys, and we discovered that's what most people thought we were anyway, so brand recognition is high," said Fuld, folding sweaters and placing them neatly into Formica cubbies in what will soon be Lehman Bros' flagship store in Moonachie, N.J.

"It's just nine miles from Manhattan, so very easy on our displaced workers," said Fuld, who will act as Lehman's chief clothing buyer and window display designer. "Plus, highway access and lots of free parking."

Lehman Brothers' bankruptcy was the largest in U.S. history, and part of an almost unprecedented Wall Street meltdown that many are blaming on a lack of sufficient regulation on the part of the government. "I really wish someone had mentioned the need for more regulation sooner," said President George W. Bush this week.

When reminded that he had been advised about exactly this scenario as far back as 2001, he responded, "I meant like when Clinton was still in office."

But although it fell the farthest, Lehman Brothers is also hoping to be the first firm to bounce back. "We're going to carry classic, durable brands that everyone loves, at great prices," said Fuld, hanging three-packs of underwear on little metal hooks. "BVD, Van Heusen, Dockers, and we'll even have some celebrity fashions - Lenny Kravitz has a clothing line now, and we're also going to carry the Tim McGraw cologne."

Lehman Brothers will beat the competition by offering "friendly personal service," said Fuld. "Also, we're thinking of getting a guy who sits in the parking lot and sells pretzels."

Lawrence F. Gray, formerly vice president of finance and now head of the outerwear department at Lehman Brothers, said he's looking forward to his new career path. "It's actually kind of exciting," he said. "For instance, did you know that outerwear isn't just coats and jackets? It's also hats."

When asked about how he felt to have gone from being a VP with a $2 million annual salary to a retail store manager making $46,178 a year, Gray hesitated for a second, put his finger in the air as if to respond, and then broke down sobbing for a full 10 minutes.

Meanwhile, several other troubled firms are following in Lehman's footsteps. Loan guarantor Fannie Mae will be selling fine chocolates, and floundering insurance giant AIG will get into the fast-food fried chicken industry. "Wall Street, gutting and boiling chickens alive - it's all pretty much the same thing," noted outgoing AIG CEO Robert B. Willumstad.

It's moves like this that will help the economy rebound, said Treasury Secretary Henry Paulson, who added that despite recent bailouts the U.S. financial markets are "fragile, like a girl who's been through a rough breakup, or a snowflake, or a Faberge egg dropped from a great height."

But Lehman Brothers still hopes to be the first back on its feet, with a grand opening in time for the Christmas rush. Fuld says they're banking on good word of mouth, a series of billboards on the New Jersey Turnpike in the Monmouth County area, and ads promoting their new motto: "You're going to like the way you look; we guarantee it - not like with all those mortgages."

SARAH PALIN SAID YES, THANKS, TO A ROAD TO NOWHERE IN ALASKA

As governor, she spent the money elsewhere and moved ahead with a $26-million road to the nonexistent bridge.

By Erika Hayasaki, Los Angeles Times Staff Writer
September 19, 2008

GRAVINA ISLAND, ALASKA -- The 3.2-mile-long partially paved "road to nowhere" meanders from a small international airport on Gravina Island, home to 50 people, ending in a cul-de-sac close to a beach.

Crews are working to finish it. But no one knows when anyone will need to drive it.

That's because the $26-million road was designed to connect to the $398-million Gravina Island Bridge, more infamously known as the "bridge to nowhere." Alaskan officials thought federal money would pay for the bridge, but Gov. Sarah Palin killed the project after it was ridiculed and Congress rescinded the money. Plans for the road moved forward anyway.

Some residents of Ketchikan -- a city of 8,000 on a neighboring island where the bridge was to end -- see the road as a symbol of wasteful spending that Palin could have curtailed. Some of them even accuse her of deception.

"Surely we won't have to commute on the highway if there won't be a bridge," said Jill Jacob, who has been writing and calling the governor's office for the last two years to protest the road. "It's a dead-end highway, a dead-end road."

Since Palin was named the Republican vice presidential nominee two weeks ago, she has been boasting that she told Congress that Alaska didn't want the hundreds of millions that had been earmarked for the bridge.

But in 2006, Palin stood before residents in this region during her gubernatorial campaign and expressed support for the bridge. It became apparent after she was elected that the state's portion would be too costly, and Palin ordered transportation officials to abandon the project.

She held on to the $223 million in federally earmarked funds for other uses, such as the Gravina road, approved by her predecessor.

"Here's my question," said Ketchikan Mayor Bob Weinstein. "If Sarah Palin is not being truthful on an issue like the Gravina bridge project, what else is she not being truthful about?"

Alaska transportation officials say construction of the road began in June 2007 because the state was still hoping to build a bridge, and "you need that highway access," said Roger Wetherell, a department spokesman.

But Weinstein, who backed the bridge project, said that Palin should have redirected the money. "If the bridge was canceled, give the money back, or get the earmark removed, or redesign the road so it's better for development," he said. "Especially if you're opposed to earmarks, and now you're telling the world you're opposed to earmarks."

His frustration came to a head after he heard Republican presidential nominee John McCain and Palin tout her reputation as a reformer focused on saving taxpayer money. He didn't feel much better when a campaign ad called them "the original mavericks," and said: "She stopped the 'bridge to nowhere.' "

Weinstein need only glance across the salmon-rich waters separating his city from Gravina Island to see what he believes are millions of dollars being spent unnecessarily. Why, he asks, didn't she stop that?



Geographic limitations

Ketchikan is on Revillagigedo Island, about 35 miles wide and 55 miles long, a stretch of rugged hills, mountains and spruce. Residents talk of reaching into the clear water and grabbing wriggling salmon with their bare hands. Locals drink rainwater, rarely use umbrellas and hide their garbage from black bears. It is a place where many residents own boats, and the 600-student high school mascot is the king salmon.

It started as a fishing enclave of Alaska Natives, then white settlers built a thriving logging industry. But the city's last major pulp mill shut down in 1997, and nearly 500 jobs were lost.

"Ten percent of our economy disappeared overnight," Weinstein said. "That's why projects like the Gravina access project became all the more important."

Tourism is now Ketchikan's main source of income, with 1 million visitors annually. Between May and September, cruise ships the size of stadiums -- often several at a time -- stop daily, unleashing passengers to admire the abundance of totem poles and stop at the dozens of stores selling necklaces and earrings made of gold nuggets and violet-blue tanzanite.

Todd Phillips and his wife, who own a shop on Main Street, moved here from Denver 11 years ago because they liked the region's tranquillity and entrepreneurial potential. But the city needs to grow, he said, adding that Palin was right on the bridge issue "in the beginning, and she should have followed through with it."

Now, Phillips said, "we feel like we just don't count. We're just a forgotten dot."

Ketchikan, with its vast stretches of protected wetlands and forests, has little room to grow. About a quarter-mile across the Tongass Narrows waters sits the mostly flat and vacant Gravina Island, about 21 miles long and 10 miles wide, and ripe for commercial and residential development. A 10-minute ferry boat ride takes passengers and their vehicles from one island to the other.

There are no freeways to the mainland for island communities in this region, so people must travel by water or air, which makes the airport on Gravina Island an essential transportation hub for people throughout southeastern-most Alaska.

"To facilitate economic growth [on Gravina], we have to be able to actually get there," said Thomas Williams, planning director for the Ketchikan Gateway Borough. "Until there is an actual road to transport goods and materials, growth is not possible."

The bridge was championed by Sen. Ted Stevens and Rep. Don Young, both Republicans, who pushed the project through Congress in 2005 using earmarks -- the controversial practice used by lawmakers to slip targeted spending into bills without public scrutiny. But that earmark quickly became the target of widespread public criticism and was labeled the "bridge to nowhere." Members of Congress eventually stripped the funds that had been designated for the bridge from a larger spending bill, but allowed Alaska to keep $223 million for other needs.

After that decision, according to a front-page article in the Ketchikan Daily News, Palin said during a Ketchikan Chamber of Commerce meeting: "The money that's been appropriated for the project, it should remain available for a link . . . to help this community prosper."



'A creeping suspicion'

Mike Elerding ran Palin's campaign for governor in Ketchikan, and she won the vote here. But when Palin took office, he said, locals began to get a "creeping suspicion that maybe she didn't mean all that she said."

In September 2007, Palin canceled the bridge project, blaming a funding shortage and lack of congressional support: "Ketchikan desires a better way to reach the airport, but a $398-million bridge is not the answer," she said in a statement.

"We're feeling a little bit caught in the middle," Elerding said recently. "We're proud she's getting national recognition, but we're also feeling betrayed."

Susan Walsh, a nurse who lives on Gravina Island, remembers attending that Chamber of Commerce meeting. When Palin withdrew her support for the bridge, Walsh figured the road project would have died with it. "It was just stupid," she said.

Jacob, the woman who has been protesting the road for two years with a letter-writing campaign on behalf of the Tongass Conservation Society in Ketchikan, says: "We begged her to stop."

An April 2007 letter to Palin read: "I am writing to encourage you to do away with the Gravina Access Highway. At about $8 million per mile of public money, this is a fiscal mistake."

State officials said alternatives to the $398-million bridge could include improved ferry service or less costly bridges that would link to the Gravina road. "Gov. Palin understood that a more cost-efficient, sensible solution could still be implemented" in place of the original bridge plan, said Maria Comella, a spokeswoman for Palin's campaign.

On a clear day recently, Mayor Weinstein flew over Gravina Island, looking down on the nearly completed road. "When Sarah Palin goes on national television and says: 'I told Congress, "Thanks but no thanks," ' it's not true," he said. "The implication is we didn't take the money. But we did."

The mayor said he was considering posting a sign on the road for the rest of the world to see. He said it would read: "Built Under Gov. Sarah Palin, Paid for With Federal Earmarks."

erika.hayasaki@latimes.com

I CAN SEE THE LIGHT!

A fresh spin.....

I'm a little confused. Let me see if I have this straight.....

If you grow up in Hawaii, raised by your grandparents, you're
'exotic, different.'

Grow up in Alaska eating moose burgers, a quintessential American story.

If your name is Barack you're a radical, unpatriotic Muslim.
Name your kids Willow, Trig and Track, you're a maverick.

Graduate from Harvard Law School and you are unstable.
Attend five different small colleges before graduating, you're well grounded.

If you spend 3 years as a brilliant community organizer, become the
first black President of the Harvard Law Review, create a voter
registration drive that registers 150,000 new voters, spend 12 years
as a Constitutional Law professor, spend 8 years as a State Senator
representing a district with over 750,000 people, become chairman of
the state Senate's Health and Human Services committee, spend 4
years in the United States Senate representing a state of 13 million
while sponsoring 131 bills and serving on the Foreign Affairs,
Environment and Public Works and Veteran's Affairs committees, you
don't have any real leadership experience.

If your total resume is: local weather girl, 4 years on the city
council and 6 years as the mayor of a town with less than 7,000
people, 20 months as the governor of a state with only 650,000 people,
then you're qualified to become the country's second highest ranking
executive and next in line behind a man in his eighth decade.

If you have been married to the same woman for 19 years while
raising 2 daughters, all within Protestant churches, you're not a
real Christian.

If you cheated on your first wife with a rich heiress, and then left
your disfigured wife and married the heiress the next month, you're a
true Christian.

If you teach responsible, age appropriate sex education, including
the proper use of birth control, you are eroding the fiber of society.

If, while governor, you staunchly advocate abstinence only, with no
other option in sex education in your state's school system while
your unwed teen daughter ends up pregnant, you're very responsible.

If your wife is a Harvard graduate lawyer who gave up a position in
a prestigious law firm to work for the betterment of her inner city
community, then gave that up to raise a family, your family's values
don't represent America's.

If your husband is nicknamed 'First Dude', with at least one DWI
conviction and no college education, who didn't register to vote until
age 25 and once was a member of a group that advocated the secession
of Alaska from the USA, your family is extremely admirable.

It is much clearer now…

ELVIS RIDES THE BUS

Passengers on the 62 line witnessed a rare treat when “The King” Elvis Presley boarded the bus on Friday evening. Elvis was in town for a private function, however he and his band were gracious enough to perform the song, “Burning Love” while riding to their destination. Fortunately, surveillance cameras on the bus were able to record the entire performance.

When asked why a man of his stardom would ride public transportation, Elvis replied, “Whenever I'm in Portland, I always ride TriMet. I've always had a pleasant experience and I particularly enjoy the 62 line because the drivers are so courteous and knowledgeable. I can leave my limo at Graceland.”

Elvis signed autographs and posed for photographs before leaving and promised to be back again.

"ROSS RACER" SUFFERS BLISTER ON HAND WHILE ADJUSTING BUS SEAT

"ROSS RACER" ABLE TO COMPLETE HIS ROUTE

While driving his 62 bus on Wednesday afternoon, "Ross Racer" had difficultly adjusting the seat of bus #1846 at his relief point. The adjustment knob was so stiff and difficult to turn that a blister developed on his right hand. "Ross Racer" admitted that he was not wearing his driving gloves at the time, but the knob should turn freely for a easy adjustment.

No longer being a "spring chicken", "Ross Racer" requires the seat to be very stiff and in the highest position, otherwise he suffers from sore knees if he is forced to drive with the seat too low.

Despite his valiant efforts, Ross was unable to adjust the seat high enough, so TriMet dispatch sent out a replacement bus.

"Ross Racer" is resting comfortably at home and is expected to make a full recovery.

ANOTHER BUS STOP SIGN MISSING

POLICE ARE BAFFLED BY RISE IN THEFTS ON 62 BUS LINE

Beaverton bus riders on the popular TriMet 62 bus line are dealing with the loss of yet another bus stop sign. Thieves have taken the post and sign from the stop at SW Hocken St. over the weekend.

Despite stepped up efforts from the police, there has been a rash of stolen bus stop signs in recent weeks, primarily on the 62 line. Police fear an organized crime ring may be responsible and may seek help from federal authorities to solve this problem.

Meanwhile, the Cold Stone Ice Cream shop at the nearby Cedar Hills Crossing Shopping Center has donated a $10 gift card as a reward to anyone who can help crack this case.

SUNSET BOB SELECTS LAUREN UPTON FOR VICE PRESIDENT

CHOICE IS RECOGNIZED FOR HER FOREIGN AFFAIRS EXPERTISE

Today Sunset Bob named Lauren Upton as his Vice-Presidential candidate to further strengthen the upsurge of support his candidacy has received recently.

"We don't have a lot of time before Election Day, so I needed someone who can hit the road running and I think Ms. Upton is a perfect choice." said Sunset Bob while taking a well deserved break at the Sunset Transit Center.

"She is a regular reader of my blog so I know she is aware of all of the important issues that face us. She works well under pressure which makes her an asset to the campaign and our country."